Question

Which committee formulated to look into the matter of capital account convertibility in India?
A.Narsimhan committee
B. Tarapore committee
C.Tandon committee
D.chore committee
F.none of the above

Answer 1

Hint:Capital account convertibility or we can say it as a (CAC) also is a feature of a nation's financial regime .Also (CAC) focuses on the ability to conduct different transactions of local financial assets into foreign financial ones.

Complete answer:
Narsimhan committee: This committee do different works like :
Abolition of Directed Credit Programme.
Free Determination of Interests Rate.
Reconstitution of the Banking System.
Deduction in Liquidity Ratio.

Tarapore committee: Tarapore Committee defined as Capital account convertibility, as the freedom to convert local financial assets, with foreign financial ones.and vice-versa. At market determined rates of the exchange and mentioned the following as its benefits.this committee represents a summation of the country's current demand and supply of the claims on foreign currencies or vice versa.

Tandon committee:This committee gives recommendations for obtaining periodical information that may be obtained from the borrower by the banks .Also , This committee suggests different guidelines for commercial banks and supervise the credit, and they make sure the proper use of funds and also keeps watch on safety of it.

Chore committee : This committee was asked to review ,cash credits system in recent years.

This committee accounts works like
(a ) check Annual Revenue of Accounts.
(b) Bifurcations of the Accounts discontinue.
(C)Withdrawal of Funds.
(d)check Non Peak Level and Peak Level

Hence, the correct answer is option (B).

Note:Capital account convertibility states that Capital inflows should be invested in semi-liquid assets so that it can prevent excessive outflow and churning .There should be a significant amount of it.